COBRA Notices May Include Extra Marketplace Info

By Stephen Miller, CEBS Sep 7, 2016

The COBRA election notice that employers must provide to departing employees can include additional information about enrolling in health coverage through the Affordable Care Act's Marketplaces, or public exchanges, beyond the information already in the Department of Labor's (DOL's) model notice.

The DOL recently clarified in a set of frequently asked questions (FAQs) that benefit plan administrators are allowed to include within the COBRA election notice extra information about the Marketplaces that goes beyond the model language, which currently consists of the following paragraphs:

You may have other options available to you when you lose group health coverage. For example, you may be eligible to buy an individual plan through the Health Insurance Marketplace. By enrolling in coverage through the Marketplace, you may qualify for lower costs on your monthly premiums and lower out-of-pocket costs.  Additionally, you may qualify for a 30-day special enrollment period for another group health plan for which you are eligible (such as a spouse's plan), even if that plan generally doesn't accept late enrollees. 
Are there other coverage options besides COBRA continuation coverage? Yes. Instead of enrolling in COBRA continuation coverage, there may be other coverage options for you and your family through the Health Insurance Marketplace, Medicaid, or other group health plan coverage options (such as a spouse's plan) through what is called a "special enrollment period." Some of these options may cost less than COBRA continuation coverage. You can learn more about many of these options at

The FAQs state that acceptable supplementary information for COBRA notices may include, among other points:

  • How to obtain assistance with enrollment (including special enrollment).
  • The availability of financial assistance.
  • Further information about Marketplace websites and contact information.
  • General information regarding particular products offered in the Marketplaces.
  • Other information that may help qualified beneficiaries choose between COBRA and other coverage options, including continuing on the employer's group plan.

In addition, "COBRA election notices may be tailored to particular groups like young adults aging out of dependent coverage on their parents' health plan," according to one of the FAQs. But "In all cases, they are required to be 'easily understood by the average plan participant' and, therefore, information should not be too lengthy or difficult to understand."

“The guidance explicitly encourages plans to consider ways to help qualified beneficiaries choose the coverage that best meets their needs,” states an alert from consultancy Xerox HR Services.

Language Isn't Mandatory

"Although use of the DOL's model COBRA notice isn't mandatory, many plans use the model as the basis for their own notices," said Ron Present, partner and health care industry group leader at CPA and consulting firm Brown Smith Wallace in St. Louis. He suggested that health plan administrators "may wish to better inform qualified beneficiaries by including additional health insurance Marketplace details as contemplated by the FAQ."

"The FAQ reiterates that use of the DOL model COBRA election notice will continue to be considered good faith compliance with COBRA election notice requirements," said Rory Akers, ERISA compliance attorney at Lockton Companies, a benefits brokerage and HR services firm in Kansas City, Mo.

"Keep in mind that should employers or their COBRA administrators opt to amend their COBRA notice election forms to include additional information about ACA Marketplace coverage options, they need to ensure the amended election notice meets all COBRA requirements, and is easily understood by the average plan participant," she added.

B. David Joffe, a benefits attorney at Bradley, a Nashville-based law firm, added that "Many employers work with third-party administrators that assist in providing COBRA notices. Those employers may want to check with their providers about adding language about the Marketplace to their COBRA notices. For those employers who provide the COBRA notices directly, they can modify the notices as provided in the FAQ."


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